When we spoke with AcadiaSoft almost three years ago, we weren’t entirely sure that there was a success story waiting in the wings there. Other collateral management technology firms that we spoke with at the same time thought that the firm had gone out of business. In fact, AcadiaSoft was and is a going concern and reported some important client wins this week including Cheyne Capital and Goldman Sachs Asset Management.
AcadiaSoft is leading with a product they call MarginSphere, which seems like the same product set they had three years ago with a better name. AcadiaSoft says “MarginSphere is a margin confirmation community where counterparties engaged in collateral management electronically confirm margin calls, substitutions, and interest statements.” Three years ago, the AcadiaSoft Messaging Platform was meant to be the interconnected messaging portion of getting collateral communications from Point A to Point B. MarginSphere also incorporates a front-end that AcadiaSoft had a few years ago as well.
We wonder if AcadiaSoft’s success due to its better business model or product or is it as much a function of the growing need for collateral management technology products. In November 2011 we wrote about Lombard Risk’s prominence in financial technology surveys. At the time we noted that Lombard Risk was benefitted from a general upswing in demand for regulatory and collateral management reporting services.
To partly answer this question, we think that AcadiaSoft is doing a very solid job in its business partnership activities. Providing access through MarkIt for OTC derivative traders is about as good as it is going to get in terms of market access. Providing an API is also helpful for the do-it-yourself crowd.
Our earlier conversations with the firm suggest to us that they are thinking ahead to look at industry trends and how they fit in. We think that we’ll hear more from AcadiaSoft as the industry adopts more collateral management solutions in general.